US-China trade talks to take place in Beijing in early January

A cargo ship is seen at a port in Qingdao in China's eastern Shandong province.
A cargo ship is seen at a port in Qingdao in China's eastern Shandong province.PHOTO: AFP

WASHINGTON (BLOOMBERG) - A United States government delegation will travel to Beijing in the week of Jan 7 to hold trade talks with Chinese officials, two people familiar with the matter said.

Deputy US Trade Representative Jeffrey Gerrish will lead the Trump administration's team, which will also include Treasury Under Secretary for International Affairs David Malpass, according to the people, who spoke on the condition of anonymity.

Neither the USTR nor Treasury responded to requests for comment.

Next month's meeting will be the first face-to-face discussion the two sides have held since President Donald Trump and China's Xi Jinping agreed on a 90-day truce in Argentina this month. Treasury Secretary Steven Mnuchin said last week that the US team and its counterparts have held discussions over the phone.

The meeting adds to signs that the world's two largest economies are making progress in cooling trade tensions. Beijing this week announced a third round of tariff cuts, lowering import taxes on more than 700 goods from Jan 1 as part of its efforts to open up the economy and lower costs for domestic consumers.

US stocks extended gains on news of the talks.

The S&P 500 Index rose 4.96 per cent as of 4pm in New York, after falling within two points of a bear market earlier in the session.

Mr Trump has agreed to put on hold a scheduled increase in tariffs on some US$200 billion (S$274 billion) in annual imports from China while the negotiations take place.

He is pushing the Asian nation to reduce trade barriers and stop alleged theft of intellectual property.

Beijing so far has pledged to resume buying American soybeans and to at least temporarily lower retaliatory tariffs on US autos.

While it's positive that USTR will be leading the delegation next month, the two sides are not on track to make the kind of large-scale breakthrough that the Trump administration is seeking, according to Mr Derek Scissors, a China expert at the American Enterprise Institute.

"The failure of Cabinet-level officials to even meet in the first half of the 90-day period makes it impossible to anticipate fundamental change on the Chinese side," he said.

HARD DEADLINE

Mr Trump said after returning from his South American meeting with Mr Xi that US Trade Representative Robert Lighthizer would be in charge of the China talks.

Mr Lighthizer, who isn't scheduled to join the delegation in China, left no wiggle room for the two countries to extend talks beyond 90 days, saying this month that March 1 was a "hard deadline" that was endorsed by Mr Trump.

"When I talk to the president of the United States, he is not talking about going beyond March. He is talking about getting a deal if there is a deal to be done in the next 90 days," Mr Lighthizer told CBS on Dec 9.

But Mr Trump and other members of his trade team, including National Economic Council director Larry Kudlow, have said they could further delay an escalation in tariffs if the two sides made sufficient progress.